The Nation State in Crisis

One of the central impacts of the spread of network technologies has
been the diminution in the power of the state and the collapse of
national borders. Within 100 years the Nation State has gone from
being the dominant global entity to a network of mid-level players in
the global economy. Today the leaders of most nation States (with the
exception of superpowers such as the US and China) recognise they are
interdependent and are more interested in taking down barriers, than
building new ones.

To many, this phenomenon that has been called 'globalisation'
has become Public Enemy Number One. People take to the streets to
protest this change, attributing all the evils of modern life to the
collapse of the Nation-State - forgetting that the same institution
has been the author of so much misery and war over the past few
centuries.

If each age reflects the technology of its time, then the Nation State
era reached its high point alongside the dominance of the broadcast
media. Inaccessible Heads of State presided over their subjects from
on high - making universal laws, issuing decrees and dispensing public
money through an intricate hierarchy of authority. Where the Head of
State was a monarch, there was no need to interact with
subjects. Dictators might rise to power with popular support, but once
there would typically exercise power by coercion. Only in democracy
was there a two-way exchange - and only here at election time.

While the National Government was the overarching structure; the
ultimate hierarchy, newspapers and television were the most
influential force shaping public opinion. In an information poor
society broadcast media was widely consumed because it was virtually
the only source of news about the world outside the local
neighbourhood. They were a channel for information from the top of the
hierarchy down to the populace. While the Fourth Estate fulfilled a
scrutinising function in democratic countries, even here information
flow could be carefully controlled, through the controlled release of
information, official secrets legislation and defamation and libel
laws.

The broadcast structure was effective in developing a sense of unity
across nations. By creating a common pool of information, it allowed
larger communities to develop a unitary national culture with the
governmental structures at its apex. But it did so at the exclusion of
both outside foreign influences and internal regional interests. This
left the community driven by Nationalism. Populist leaders were able
to gain greater authority through the manipulation of this sentiment -
often resulting in open conflict with other Nations. Individuals were
prepared to die for their Nation State - and did so in their millions.

The crisis for the Nation State has emerged because it is no longer
able to control the flow of information across national boundaries. In
a world increasingly shaped by the Internet and the electronic media,
geography itself has become less important in determining
perspective. If information flows freely between boarders and within
Nations, governments, then the media people consume will have a more
international perspective, making it difficult for a government to
maintain a single culture that is hostile to outside influences. At
the same time, the hierarchies that support national governmental
authority are under pressure because of the better information flow -
driven by new network technologies. And as the structure weakens so
does its power, including a diminishing capacity to control the media,
meaning more information leaks out. And around it goes.

Diverstiy Rules

Western culture is today embracing diversity rather than reinforcing
the fear of difference and isolationism which characterised the
Industrial Age. Private sector companies are beginning to recognise
the bottom line value in maintaining a culturally diverse
organisation. The different has become chic on so many levels. And as
nations become increasingly prone to influence from external factors,
beyond their control, then their ultimate power as the source of the
mono-culture necessarily erodes.

National governments are instead being buffeted around in the global
sea of ideas and influences - constantly struggling to react and
adjust to the rapidly changing global environment. They are no longer
the masters of their destinies - the nation is now just a constituent
of the global community, struggling to influence events.

The most stark example of this is the move to economic globalisation -
the net effect of floating exchange rates, falling tariff barriers,
shifting trade balances. In areas as diverse as petrol prices, home
interest rates and the level of taxation, the global economic
performance of a nation state has an impact on the quality of life of
ordinary citizens. When the economy is growing, jobs are created and
prosperity is spread; when things go bad people lose jobs. But
government is no longer operating in a controlled
environment. It's not enough to pull a few economic levers. The
economy is interrelated with that of every other Nation State, beyond
the control of any one (with perhaps, a single exception, the largest
Nation State of all, the United States).

This also means the integrity of national culture, along geographic
lines is compromised. Culture takes on a new meaning when it is no
longer an absolute, but can be constructed by and for each individual
member of society. We begin to operate in a sea of cultural
influences, able to pick, choose and blend - depending upon our needs
and personal preference. But this can only be achieved in an
environment of tolerance and mutual understanding - the cornerstones
of hybrid western culture. And in losing our monoculture, we end up
gaining something of far greater substance.

Critics of globalisation would argue that both economically and
culturally, the demise of the Nation State has been replaced by the
dominance of American corporations. In both business and culture, it
could be argued that far from creating a hybrid culture, we are seeing
the creation of a mono-culture. While this argument has superficial
appeal, it misses a few important points. First, America is the most
culturally diverse of all the traditional nation-states, a country
built on immigration from the more structured societies of the Old
World. Secondly, in both economics and culture, the corporations are
freeing themselves of national bonds. Companies source labour from
around the globe, as does Hollywood. The other important point to note
is that this is occurring in a context where broadcast technology
still dominates, where the mass media can still construct an American
dream. As discussed earlier, it will be interesting to watch the ways
the mass media attempt to defy gravity as network technologies are
taken up over the coming years.

There is also a marked change in the way the nations states of the
world govern themselves. In the Industrial Age, nation states based
their power on their ability to conquer territory in less economically
developed parts of the globe that delivered them the raw materials to
generate wealth for their people. They would fight against other
powerful states for even more territory, more markets or plain global
superiority. The citizens would benefit from the markets, but would
pay the price as fodder when competition for markets led to armed
warfare. These powerful nation States would form alliances amongst
themselves that would shift with self-interest. The conflict model
thrived through the 20th Century with two wars and probably reached
its high point in the Cold War years where the entire globe was spit
between its allegiance to one or other of the two super-powers.

In the wake of the Cold War, nation states are beginning to operate in
a different, more networked way. The emergence of bodies such as the
United Nations has created international consensus to intervene on
national sovereignty at times when the vast majority of members deem
it necessary. The development of international treaties has
accelerated since World War II, as leaders recognised there were more
efficient ways of resolving trade disputes than killing people.

This change is approaching a high-point with the move to integration
within Europe. Currently the European Union is log-jammed with nations
from the former Communist bloc, seeking membership and the trade
benefits this brings. In return they are prepared to submit their
autonomy on a range of social, economic and environment issues in
order to win membership. The EU is only the most stark of examples of
the move from unitary national governments to a more complex matrix of
governmental structures with detailed and strong lines of
accountability between levels and back to the communities they
serve. There have been similar blocs developed in North America and
Asia. Individual nations submit to these broader structures because
they have accepted it is in their interests.

And if globalism is putting pressure on the Nation State hierarchy
from the top, so too are regional interests pulling the structure down
from the bottom. A Nation State like Australia is now seen as a series
of competing component communities. States bid against each other for
international investment opportunities. Country and city regions argue
for a bigger share of the limited pie. A cultural gap is perceived
between the Sydney-Canberra-Sydney Axis and the rest of the
nation. While we all still cheer for Australia at the Olympics, our
political concerns are local: health resources for my area, education,
an airport in their backyard not mine.

While these regional priorities have gained a higher profile amidst
high levels of media concentration, network technologies promise to
take the trend to a higher plane. In the information age, regions will
be able to develop strong local media that serve the interests of a
smaller community. The Nation State will face much more competition
for community loyalty than ever before. Instead the voices of the
regions will not only have to be heard, but actually be heeded.

Localised communication networks will allow communities greater
capacity to share, develop and implement new ideas. They will no
longer need to rely on central institutions of government or media to
talk to each other. Centralised government will come under pressure to
change its role from gatekeeper of information, to facilitator of
activity conducted at a community level. In a way this is a return to
the past - the localised village structures reactivated, only this
time, a community need not be geographical - it could be based on a
particular area of interest - but the network technology will help
identify and create communities of common interest. Ultimately, our
thesis is that the freer flow of information across a growing
interconnected network is driving this process.

The One Nation Backlash

Pauline Hanson and her supporters emerged as part of the inevitable
reaction against changes brought about by the Information Age, the
decline of the nation state and globalisation. Even their name - One
Nation - reflected their fundamental objective - the restoration of
the integrity of the Nation State. They long for an era when national
governments supported a single culture within its geographic
boundaries, indigenous people and immigrants were assimilated or
excluded.

One Nation's policies embody a return to the values of the nation
state era. They stand for such Industrial Age structures as
immigration control, protectionism, heightened national defense,
unitary culture, government control, assimilation and
Keynsianism. They represent the views of the sections of our community
that have lost out in the changes driven by globalisation and the
information age. In particular they represent large sections of
Australia's traditional working class and rural constituencies;
blue collar people whose jobs and security are most under threat by
globalisation and information technology; the people to whom the
Information Age poses the most uncertainty.

Their concerns are very real because they come from the people at the
hard edge of the transition taking place. One Nation support game from
working people who were embittered by the loss of their jobs overseas
- regardless that many more jobs were being created in other parts of
the economy. The base also came from the swelling ranks of middle
managers, retrenched from firms after decades of loyal service. And it
cam from the regions, where government had failed to manage the
transition from a labour-intensive resource-based economy. From the
perspectives of all these people, the changes occurring were scary,
dangerous bad. They have seen the certainties of working life stripped
away, while others enjoy wealth beyond their modest aspiration. In
this context it was easy to find scapegoats in big business, overseas
workers, even less powerful members of society such as indigenous
Australians and welfare recipients.

One of the problems with this analysis is that while international
markets are an aspect of globalisation -and an often an ugly face - it
hast come to be confused as the phenomenon in and of itself. But in
many ways the problems workers have confronted is because companies
have taken up new network technologies while maintaining Industrial
Age modes of thinking. While they can access information, capital,
components from around the globe, they have continued to view their
workers as old-style units of labour. This deskilling of the
workforce, pushing them onto individual contracts so they can be shed
when the economy slows have all fuelled resistance to
globalisaiton. But it is not the change, but the way it has been
driven by footloose capital pre-occupied with the need to extract
short-term profits for demanding shareholders that has maximised the
pain.

The rise in discontent was also partly driven by failure of Labor
government to adequately explain the process taking place, to prepare
people for the change and negotiate with corporations on the
responsibilities that should go with greater market freedom. At the
start of the eighties the Hawke/Keating government embraced the
changes brought about by the early stages of the Information Age with
open arms. By floating the dollar, deregulating finance and reducing
tariffs they recognised the trend towards globalisation, accepting
that globalisation could not be resisted and that in the long term it
would bring enormous wealth. But it did so as if we were all on our
way to a gold-rush and by the time the eighties bubble had burst,
everyone had forgotten Bondy's America Cup triumph and wanted
things to slow down again.

Despite the popular mythology around the 1993 election, the defeat of
the John Hewson came about because the Australian population were
reform fatigued. Labor under Keating had driven them too far too fast
and that they needed to slow things down - Hewson lost because he
promised to speed things up even further. Conversley, in 1996 the
Liberals sought to minimise their exposure by proposing only moderate
polices - allowing the population to punish Paul Keating and Labor as
they had wanted to in 1993. John Howard portrayed himself as a
conservative and by doing so was able to see his government into its
second term. His strategy has been to make the reforms towards
globalisation, in the economic sphere, largely pushed by business -
but to play to the conservative forces on social issues such as the
republic or aboriginal reconciliation. John Howard does not really
embrace the information age - is happy to serve business by making the
necessary economic reforms to accommodate the global era, but is not
prepared to accept the effects these changes are having upon our
social and cultural fabric.

Since 1996 Labor has sought to re-connect with its working class
base. In doing so it has shifted its attitude towards
globalisation. Recognising that it has pushed its constituents - who
had borne the brunt of push towards globalisation - far enough, the
Labor Party amended its platform to seek to limit the effects of
change. Now, in an election year, Labor sings the praises of the
Knowledge Nation, without wanting to grab the reformist ball with the
zeal of Keating. All of which serves to demonstrate that while the
resentment of the transition from an Industrial-based to an
Information-based society have been exploited politically over the
past decade, there has not been a successful explaination for what is
actually going on. The Keating Government tried, but got too caught up
with the alchemy of economics, as if this was an end in itself.

Kim Beazley's current packaging of the 'Knowledge Nation'
is the first attempt to begin to wrap these changes into an
electorally saleable story. But the difficulty he is facing in getting
his message through a media itself under stress by the increasing
speed of information delivery, demanding bite-sized grabs rather than
a prolix analysis shows what a difficult task he faces. And
Beazley's bigger problem is that he doesn't have his whole
Party behind this orientation - and until he can construct a Laborist
rationale that explains the need for change and pain to his
constituency, he will continue to struggle here.